MONEY

From Agepedia

Jump to: navigation , search

MONEY ; the common medium of exchange among civilized nations. Money must consist of a material, 1. which has a value of its own ; 2. which every man is willing to accept in exchange for his property; 3. whose value is readily ascertained. If this material is moulded into a particular form, and stamped with a mark denoting its value, so that it is appropriated expressly to the exchanging of articles having value, it is called MONEY, in distinction from other articles which have value, but which are not used as a medium of exchange. The materials of which money is made, as well as the coin, are merchandise, like other articles that are bought and sold. Different nations, in the early periods of their cultivation, have chosen for money different materials, all having more or less of the abovementioned peculiarities. All nations advanced in trade and the arts, give preference to metals, especially the precious metals; for, 1. they derive value from the smallness of their quantities, compared with the demand for them in the ornamental and useful arts. 2. They are very little subject to corrosion and destruction by use. 3. They are susceptible of minute division, and may be used in small quantities or masses. 4. They are easily transported, as their transportation to any distance will cost but a small part of their value. 5. The quantity is increased by labor. The advantage of using the precious metals for a universal currency is still greater, when it is not left for every private man to di'vide the pieces of metal, to weigh them, and fix their fineness, but persons are appointed under the authority of the law, to decide what pieces shall be circulated as money, to stamp them so as to fix their weight and fineness, and to furnish them with the superscription of the authority by which they are authorized. Such pieces are called coins (q. v.; for the process of coining, see Mint). Instead of money, the merchant often receives a promissory note or bill: this substitute is sometimes improperly termed money. It is manifest that promissory notes or bills of exchange are of the same value with the real money only while they can be readily exchanged for coin, and that they must lose their value in proportion as the credit of those who issue them, sinks. This is true of all paper money (see Circulating Medium), and all metallic money whose current value 'i higher than its real value, all notes or bonds taken instead of money. That any sort of money may be received for its real value, or that which it represents, and trade be carried on by means of it, it is necessary that its value should be acknowledged wherever it is used. A distinction, however, is made between money which is received in only one tradingplace or small circle, issued in time of peculiar necessity, denominated tokens, &c, also coins current in only one country, and money which is every where acknowledged and received, such as bars of gold and silver, of a certain weight and fineness, also Dutch ducats, Spanish dollars. The exchangeable value of gold and silver, like that of all other commodities, depends, in the first place, on their plenty or scarceness, or, in other words, the quantity supplied in comparison with the quantity wanted, or for which there is a demand; and, in the second place, upon the labor necessary in extracting the ore from the mines, and refining it. As a general rule, it may be assumed that if, taking the aggregate of silver mines, i and that of iron mines, the expense, that is, the labor, including the use of machinery, necessary to extract a pound of silver from the ore, and refine it, is twenty times the expense, or labor, of smelting, forging and refining a pound of iron, silver will be worth twenty times as much as iron. The comparative value of gold and silver will depend upon the same causes as that of pared to that of silver, is as Jo^f to 1. V m England, as 15-J to 1; in France, as 15Jff to 1;, and in Geneva, as 15f J to 1. The comparative value is necessarily very nearly the same all over the world, since each metal costs but a trifle for transportation, and both are articles of value everywhere. The quantities of gold, in its various forms of coin and bullion of all descriptions, including bars, plate, &c, ha& been estimated to be 10,000,000 of pounds, troy weight. A scarcity of money can occur only when, 1. the material of which it is manufactured is deficient, or, % when those who are in want of it have nothing to give in exchange to its possessors. In the last case, there is no real deficiency of money, for there are individuals who, by the terms of the supposition, possess the money: there is only a deficient demand for goods on hand, and those only are in want of money who are unable to dispose of these goods. Scarcity of money, therefore, is only a relative expression; i. e. there are certain places or persons without money to obtain certain articles which they desire to possess. AH mechanics, artisans and manufacturers want money enough to purchase the raw materials which they consume, and to pay the wages of their laborers. Merchants need money to pay manufacturers and producers for their goods, and to transport them where they are wanted and the last consumer needs it to give in exchange for what he eats, drinks, wears, &c, to the dealer of whom he procures the requisite articles. Now, if any one of these classes has not the money required for any of those purposes, there is a scarcity of money for that class'of individuals. In these and similar cases, the scarcity of money does not suppose a real scarcity of gold and silver, or a deficiency of coined metals. The scarcity arises from the want of industry, or means, in any class of citizens, to procure the money in circulation, or from their industry being directed to the production of such articles as there is no present demand for among the actual possessors of money; as when, for instance, in graingrowing countries, there is a deficiency of purchasers of the grain produced, there not being consumers enough of the grain, who can obtain or produce desirable articles in exchange for it. In such a case, the producers of grain can obtain money only by exportation of the article to foreign ports. And if it /lappens that the foreign lands to which it s exported are already provided with money, out Decause tnere is no motive to induce its possessors to part with it for grain. In places where manufactures of any kinti prosper, a certain quantity of money is required to provide the materials. This sum is easily ascertained, according to a certain average, and there is no scarcity of money for these purposes, as long as this sum is on hand. But when the manufacture is increased, by the operation of particular circumstances, and the place produces more goods than common upon this account, a scarcity of money may easily occur among those devoted to this branch of business. If now these persons possess goods or credit, they make use of both to obtain the money required from other parts; which will de pend, again, upon their being able to pantile expenses of transporting their goods, or to give to the holders of money a higher interest than they can elsewhere obtain Money, in these cases, becomes of more value in these places than in those where it is not so much in demand; and it follows, from this, that money will leave the places where it is plenty to seek those where, from the want of it, more will be paid for its use; and, in this manner, a scarcity of money will work its own cure Money is profitable to any country only by means of its circulation (q. v.); for circulation makes money the continually repeated cause of the production of new portions of property; and, on this account, a very small sum of money, which is in. constant circulation, is of far more benefit to a country than the possession of the largest sums which remain locked up, and do not change owners. A great quantity of money, therefore, is of no service to a country, unless there are desirable things in that country, for the purchase of which it is to be paid, and thus transferred from one to another. When, therefore, more money flows into any country than will pay for what the country actually produces, money becomes of less value, and the money price of merchandise greater. In this case, it is better to procure the goods from countries where their money price is less. The money will thus be exported again, and procure a return of cheap goods in its place. But, by this process, the industrious part of the population are injured, and those only receive profit who make these exchanges of money for foreign goods. The laboring classes therefore experience a scarcity of money, because the articles which they producedo not command a ready sale. In tnis manner, all the gold and silver obtained by Spain and Portugal from South America passed into foreign countries in exchange for foreign necessaries. The only true means, then, to remove and to prevent permanently a scarcity of money, is to improve the state of domestic and internal industry ; and their opinion is wholly destitute of foundation, who believe that a mere plenty of money is sufficient to develope a healthy state of domestic industry ; for the mbney does not produce the goods, but follows their production. And money will not stay in a countiy that does not contain goods upon which it may be expended, but it seeks those countries which produce the objects of desire. The worst of all means of supplying a scarcity of money is the multiplication of those things (as paper of all kinds) by which it is represented, or which are used as substitutes for it; for these circulating media are only worth so much as can be obtained in real value for them, and the scarcity of the precious metals in the countiy, preventing those who desire it from exchanging their money for them, the value of this paper medium falls at once, and often to such a pitch that a million of these dollars shall not be enough for the purchase of one silver dollar. Nor does it help the case to base the value of this money upon any thing else than the precious metals; for, if their value is expressed in any article not so easily disposed of as gold or silver, as grain, for instance, these bills for grain are worth no more than the grain itself; and, if grain falls in value, these grainbills must of necessity sink with them; and, if the grain cannot be used as a means of payment, then they lose their value altogether. A circulating medium fixed upon so insecure a basis can never take the place of real gold and silver. The truth of all these remarks is strikingly illustrated by the history of the continental paper issued by the American congress, during the revolution, and by that of the celebrated French assignats, which, resting upon the credit of a people without money, and without means of getting it, were soon found to be of little worth, or of none at all. Nor is this contradicted by the fact that the paper of the bank of England remained good during the stoppage of specie payments; for the wealth and the productiveness of that nation are so great as to render all transactions safe in any paper authorized by its government; and that wealth and industry combined placeit in a situation so far removed from mosi countries, that it only forms, in this re spect, a fair exception to a general law. Money, Standard of, (See Standard.) MONGE, Gaspar, a celebrated mathematician and natural philosopher, born at Beaune, in 1746, studied in the colleges of the fathers of the oratory at Beaune and Lyons with such success that he became a teacher at the age of sixteen. He was afterwards employed at the military school of Mezieres, where he assisted Bossut, the professor of mathematics, and afterwards Nollet, professor of physics, whom he succeeded. In 1780, he removed to Paris, on being admitted into the academy of sciences, and became the coadjutor of Bossut, in a course of lectures on hydrodynamics at the Louvre. He quitted Mezieres entirely in 1783, on being appointed examiner of the marine, when he composed a Treatise on Statics, afterwards used for the polytechnic school. In 1789, like other friends of freedom, Monge indulged in expectations of the regeneration of France. Through the influence of Condorcet, he was made minister of the marine, in 1792, and he held, at the same time, the portfolio of minister of war, during the absence of general Servanwith the army. He thus became a member of the executive council of government, in which capacity he signed the order for the execution of Louis XVI. Shortly after, he resigned his functions, in consequence of which he was exposed to the persecution of the ruling party of the Jacobins, against which he successfully defended himself. He was then employed, together with other men of science, in improving the manufacture of gunpowder, and otherwise augmenting the military resources of the country. The Normal school was founded, with which Monge became connected ; and he then published his Geome'trie descriptive, one of his principal works. Together with Berthollet and Guytou Morveau, he principally contributed to tht> establishment of the polytechnic school ] after which, in 1796, he was commissioned to go to Italy, and collect the treasures of art and science from the countries conquered by the French ; and the labors of Monge and his colleagues gave rise to the splendid assemblage of works of taste and genius, which for a time ornamented the halls of the Louvre. In 1798, he went with Bonaparte to Egypt, where he was again employed in the service of science. On his return to France, he resumed his functions as professor at the polytechnic school, in the success of which he greaily interested himself. The attachment which he manifested to Bonaparte led to his being nominated a member of the senate, on the formation of that body. The emperor bestowed on him the title of count o/Pelusiwm, the senatorial lordship of Liege, made him grand cordon of the legion of honor, gave him an estate in Westphalia, and, a little before he set out on his Russian expedition, a present of 200,000 francs. The fall of his benefactor involved him in misfortunes. He was expelled from the institute in 1816, one of his sonsinlaw was exiled, and he was deprived of all his employments, His faculties became disordered, and he died July 28,1818. Besides the works above noticed, Monge published Description deVArt de fabriquer lies' Canons (4to.), and Application de VAnalyst a la Geometric des Surfaces (4to.), as well as a multitude of memoirs on mathematical and physical science. His pupil Dupin has published an Essai historique sur les Services et les Travaux scientifiques de Monge,